Public price announcements have caught many cartel enforcers’ eye. The European Commission recently published draft commitments by a number of container liner shipping companies to refrain from making regular public announcements about future price increase intentions. Similar promises were made by cement suppliers to the UK Competition Authority and by mobile operators to the Dutch competition regulator ACM. All the more reason for companies to think twice before making public statements on future conduct.
In November 2013, the European Commission opened formal antitrust proceedings against a number of container liner shipping companies to investigate whether their regular public announcements of price increase intentions through press releases on their websites and in the specialised trade press constituted an anti-competitive concerted practice. The Commission was concerned that this behaviour could allow the companies to signal future price intentions to each other. In February 2016, the companies offered the following commitments to address these concerns:
- The companies would stop publishing and communicating General Rate Increase announcements, that is, changes to prices expressed solely as an amount or percentage of the change.
- In order for customers to be able to understand and rely on price announcements, the price figures that the companies announced would benefit from further transparency and include at least the five main elements of the total price (base rate, bunker charges, security charges, terminal handling charges and peak season charges if applicable).
- Any such future announcements would be binding on the companies as maximum prices for the announced period of validity (but would remain free to offer prices below these ceilings).
- Price announcements would not be made more than 31 days before taking effect, which is usually when customers start placing orders in significant volumes.
The European Commission is not the first competition authority to be concerned about public announcements. Following an in-depth investigation into the cement sector, the UK Competition Authority (CMA) published its final order in January 2016, prohibiting cement suppliers from sending generic price announcement letters to their customers and thus reducing transparency in the cement market in Great Britain. Instead, price announcement letters will need to be specific and should set out the last unit price paid, the new unit price, and specific details of other charges applicable to the specific customer.
Similarly, in 2013, the Dutch competition regulator ACM concluded its investigation into the mobile telecommunications market with no evidence of price-fixing, although it did consider that the mobile operators’ public announcements of future behaviour had potential antitrust risks. Due to the highly concentrated market structure of the Dutch telecommunications market, the ACM found that the regular public statements by three major mobile operators on intended price increases without a prior final internal decision, could lead to collusive behaviour. The mobile operators therefore offered the ACM commitments to not make any further public announcements on future market prices or other commercial conditions until they have been finalised.